Glossary

Short definitions as used on this site for the 2026/27 tax year. Not legal definitions. For the full stack order see the methodology.

Take-home pay

What remains after the deductions this site models: income tax, employee National Insurance, one student loan (if any) and the employee pension contribution in the model. A real payslip can deduct more (or less).

Gross pay

Pay before those deductions. On salary landings this is the annual salary. On the hourly page it is rate × hours × paid weeks.

Taxable pay

Gross after pension treatment that reduces taxable pay, before the personal allowance is applied. Not the same as NI-able earnings when the pension is a net pay arrangement.

Personal allowance

£12,570 of income on which you pay no income tax, if you have the standard allowance. Reduced by £1 for every £2 of income above £100,000. Gone at £125,140.

Personal allowance taper

Above £100,000 the standard allowance falls by £1 for every £2 of income. The worked case is on the £100,000 guide.

Basic rate / higher rate (rest of UK)

In England, Wales and Northern Ireland: 20% on the next £37,700 after the allowance (up to a total income of £50,270 with a full allowance), then 40% up to £125,140, then 45%.

Scottish bands

Six rates from 19% to 48% on non-savings, non-dividend income. National Insurance is still the UK employee rates. See the Scotland vs rest of UK guide.

Employee National Insurance

Class 1 primary contributions. For category A in 2026/27: 8% between the primary threshold (£12,570) and the upper earnings limit (£50,270), then 2% above. Calculated per pay period in real payroll; this lab models the year.

Upper earnings limit

£50,270 in 2026/27. Employee National Insurance is 8% up to this limit and 2% above it, in the annual model. The £50,270 salary landing sits on that hinge.

PAYE

Pay As You Earn — how employers collect income tax and student loan from wages. Take-Home Lab is not a PAYE engine; it is an annual illustration.

Tax code

Usually something like 1257L for a standard personal allowance. Other codes (BR, D0, K codes, week-1 / month-1) change how payroll collects tax. This site does not model every code.

Net pay arrangement

Pension taken from pay so that taxable pay falls, but National Insurance is usually still calculated on the unreduced figure.

Salary sacrifice

You give up part of salary; the employer pays that amount into the pension. Taxable pay and NI-able earnings both fall in a typical arrangement. Scheme paperwork decides the real treatment. See the salary sacrifice guide.

Student loan plans

Plan 1, 2, 4 and 5 repay 9% of earnings above a plan threshold. Postgraduate loans repay 6% above £21,000. Thresholds used here are the 2026/27 HMRC collection figures. The calculator models one undergraduate plan, plus a Postgraduate Loan alongside it if you tick the box; HMRC deducts both from the same pay.

Plan 2

Common England and Wales undergraduate plan for many post-2012 loans. This site uses the 2026/27 threshold £29,385 and 9%. See the Plan 2 guide.

Plan 5

Undergraduate loan plan for English undergraduate courses starting on or after 1 August 2023. This site uses a £25,000 threshold and 9%. See the Plan 5 guide.

Bonus

Treated as extra gross in the annual model. The month it is paid can differ because National Insurance is periodic. See the bonus guide.

Marginal rate

How much of the next pound of gross is lost to tax and NI (and loan, if any) in this model. Below £50,270 with no loan and no pension, income tax 20% plus NI 8% leaves a 28% combined bite on that pound.

Updated 12 November 2026. See the methodology for the stack.